GLOBAL MARKETS - Gold at record; Asia stocks limp on U.S. fears

By Rafael Nam

HONG KONG (Reuters) - Gold hit a record near $900 an ounce on Monday as investors sought protection against a potential U.S. recession and a weaker dollar, and Asian stocks remained pinned at more than three-week lows.

But Taiwan stocks rose 1.8 percent to a one-week high following a resounding win by the China-friendly Nationalist Party (KMT) in Saturday's legislative elections, sparking hopes of an easing in cross-strait tensions.

After Wall Street's near-2 percent drop on Friday, financial bookmakers predicted European stocks would open lower on Monday, forecasting Britain's FTSE 100 would start 22-27 points down, Germany's DAX 18-24 points lower and the French CAC 40 down 17-23 points.

Asian stocks have posted their worst start to the year since the region's financial crisis in 1998, according to Reuters calculations. A decade later, worries about a slowdown in the United States, Asia's biggest export market, and the U.S. housing sector, are hitting Asian shares.

The uncertainty has boosted the value of safe haven assets such as gold, with investors steering clear of stocks at the start of a week in which U.S. financial heavyweights such as Citigroup and Merrill Lynch are expected to post big losses and more capital raising plans.

"Buying appetite has emerged after stocks dropped sharply last week, but a meaningful rebound is unlikely as investors look ahead to U.S. economic data and earnings from U.S. financial institutions," said Lee Kyung-soo, an analyst at Daewoo Securities in Seoul.

MSCI's measure of Asia Pacific stocks excluding Japan was off 0.03 percent as of 0635 GMT, after earlier touching its lowest level since Dec. 20. Tokyo markets were closed for a holiday.

South Korean shares were down nearly 1 percent, while markets in Australia and Hong Kong were flat to a touch lower.